Module 3 explains Medigap (Medicare Supplement Insurance). This training module was developed and approved by the Centers for Medicare & Medicaid Services (CMS), the Federal agency that administers Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). The information in this module was correct as of June 2010. To check for updates on health care reform, visit www.healthreform.gov. To check for an updated version of this training module, visit www.cms.hhs.gov/NationalMedicareTrainingProgram/TL/list.asp on the web. This set of National Medicare Training Program materials is not a legal document. The official Medicare program provisions are contained in the relevant laws, regulations, and rulings.
This module includes lessons on the following topics: Original Medicare Coverage (gaps) Medigap Basics Buying a Medigap Policy 2010 – What is New Medigap Plans Medigap Rights and Protections Information Sources for Medigap
07/12/2010 3
Original Medicare Coverage Gaps in Original
Medicare Coverage What is covered in
Original Medicare– Part A – Part B
What is not covered
Medigap (Medicare Supplement Insurance)
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Presentation Notes
Original Medicare Coverage explains: Gaps in Original Medicare Coverage What is covered in Original Medicare Part A Part B What is not covered
Gaps in Original Medicare Coverage
Original Medicare doesn’t cover everything– Original Medicare pays a share
– You pay a share
If you buy a Medigap policy – The policy pays all or part of your share
Original Medicare doesn’t cover everything Original Medicare pays a share People with Original Medicare are responsible for a share of their Medicare-covered services and supplies. If you buy a Medigap policy The policy helps cover the gaps in Original Medicare coverage. Medigap, in most cases, only pays a share towards Medicare-covered services and supplies. Coverage depends on the Medigap plan you buy. For more detailed information about Medicare coverage, you can view, order, or download the publication Your Medicare Benefits from http://www.medicare.gov/Publications/Pubs/pdf/10116.pdf.
– $1,100 deductible for days 1 – 60 – $275 per day for days 61 – 90 – $550 per day for days 91 – 150
– $0 for first 20 days– Up to $137.50 per day for days 21 – 100– 100% after day 100
– 100% for first 3 pints– 20% for additional pints
Part A – (Hospital Insurance)
What You Pay in Original Medicare
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Presentation Notes
What you pay in 2010 – Part A (for medically-necessary services) Here are some gaps in Original Medicare coverage (your out-of-pocket expenses). Medigap policies coverage depends on the plan you choose. Hospital Stays $1,100 deductible for days 1 – 60 $275 per day for days 61 – 90 $550 per day for days 91 – 150 Skilled Nursing $0 for first 20 days Up to $137.50 per day for days 21 – 100 100% after day 100 Blood If you are an inpatient, need blood, and the hospital has to buy blood for you, each calendar year you would pay for the first 3 pints (the deductible) and 20% for any additional pints, unless you or someone else donates blood to replace what you use. In most cases, the hospital gets blood from a blood bank at no charge and you won’t have to pay for it or replace it.
– $0 for home health care services – 20% for durable medical equipment for
providers accepting assignment (Contract Provider if in Competitive Bidding Area)
– Up to $5 copayment for outpatient prescription drugs
– 5% for inpatient respite care – Room and board, in some cases– $5 for prescription drugs
Part A – (Hospital Insurance)
What You Pay in Original Medicare (continued)
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Presentation Notes
What you pay in 2010 – Part A (for medically-necessary services) Home Health Care $0 for home health care services 20% for durable medical equipment for providers accepting assignment (Contract Provider if in a Competitive Bidding Area*) Up to $5 copayment for outpatient prescription drugs Hospice Care (Remember, Medigap’s Basic Benefits have changed this year to include Hospice Care.) 5% for inpatient respite care Room and board, in some cases $5 for prescription drugs *Only contract suppliers will be able to provide certain DMEPOS items or file claims with Medicare for payment in California - Riverside, San Bernardino, Ontario Florida - Miami, Fort Lauderdale, Miami Beach Florida - Orlando, Kissimmee Missouri and Kansas - Kansas City North and South Carolina - Charlotte, Gastonia, Concord Ohio - Cleveland, Elyria, Mentor Ohio, Kentucky, and Indiana - Cincinnati, Middletown Pennsylvania - Pittsburgh Texas - Dallas-Fort Worth, Arlington
Additional gaps or out-of-pocket expenses in Original Medicare include: The Part B deductible $155 per year in 2010 Coinsurance for Part B services. In general, you pay 20% for most covered services for providers accepting assignment. (Covered services include medically-necessary: doctor’s services; outpatient therapy such as physical therapy, speech therapy, occupational therapy, subject to limits; most preventive services; durable medical equipment; and blood received as an outpatient that was not replaced after the first 3 pints.) You pay 45% for outpatient mental health services for providers accepting assignment. The percentage will be changing as follows: 2011—45 percent 2012—40 percent 2013—35 percent 2014 on—20 percent For more information on Medicare coverage of Mental Health Care, you can view, order or download the publication Medicare and Your Mental Health Benefits from www.medicare.gov/Publications/Pubs/pdf/10184.pdf.
Most Medigap policies generally don’t cover things not covered by Original Medicare. Long-term care Vision and dental care Including eyeglasses Hearing aids Private-duty nursing Outpatient prescription drugs Medigap policies sold before January 1, 2006, may include prescription drug coverage for people not enrolled in a Medicare drug plan. If you have a Medigap policy and a Medicare drug plan, your Medigap policy will not cover deductibles, coinsurance, copayments, or premiums under your Medicare drug plan.
07/12/2010 9
Medigap Basics What Medigap is Standardized plans Important Medigap terms
Medigap (Medicare Supplement Insurance)
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Presentation Notes
Medigap Basics explains: What Medigap is Standardized plans Important Medigap Terms
Sold by private insurance companies– Licensed by your state
Supplements Original Medicare
Follow Federal/state laws that protect you
Must state “Medicare Supplement Insurance”
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Presentation Notes
Medigap Policies: Are private health insurance. Medigap plans cover only the policyholder. Spouses must purchase separate policies. Sold by private insurance companies Supplement Original Medicare (help pay for “gaps” in Original Medicare coverage - like deductibles, coinsurance and copayments) Pay for Medicare-covered services provided by any doctor, hospital, or provider that accepts Medicare (the exception is Medigap SELECT policies that require you use specific hospitals, and in some cases, specific doctors to get full benefits. See slide 41.) May cover some things Medicare doesn’t depending on the Medigap plan Must follow Federal and state laws that protect people with Medicare Must clearly be identified as “Medicare Supplement Insurance”
A Medigap policy may help you– Lower your out-of-pocket costs
– Get more health insurance coverage
Considerations include– Your other coverage and health needs
– If your doctor accepts assignment
What is a Medigap policy? (continued)
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Presentation Notes
You may want to buy a Medigap policy: To help lower your out-of-pocket costs. Medicare does not pay for all of your health care. There are “gaps” or costs that you must pay in Original Medicare that may be covered depending on the plan you choose. To get more health insurance coverage. When making your decision to buy a Medigap policy, there are a few things you should consider: Whether you have other health insurance, e.g., from a union or employer How often, and what type of health care you need Whether your doctor accepts the Medicare-approved amount as full payment, also known as “assignment” Assignment is an agreement between Medicare and health care providers and suppliers to accept the Medicare-approved amount as payment in full. You pay the deductibles and coinsurance (usually 20% of the approved amount). If assignment is not accepted, health care providers can charge you up to 15% above the approved amount (called the “limiting charge”) and you may have to pay the entire amount up front. NOTE: It is illegal for someone to sell you a Medigap policy if you Are in a Medicare Advantage Plan (unless your enrollment is ending) Have Medicaid (unless Medicaid pays for your Medigap policy or only pays your Medicare Part B premium), OR Already have a Medigap policy (unless you are canceling your old Medigap policy)
Standardized Medigap plans Medigap insurance companies in most states can only sell you a “standardized” Medigap policy. As of June 1, 2010, there are 10 standardized policies being sold, plans A, B, C, D, F, G, K, L, M, and N. The insurance companies don’t have to sell all plans. Companies must offer Medigap Plan A if they offer any other Medigap policy. If a company sells any plan other than Plan A, it must also offer Plan C or Plan F. Prior to June 1, 2010, 4 other standardized plans were sold in most states, plans E, H, I, and J. These plans are still in existence but are not being sold. Some people may still have a Medigap policy they purchased before the plans were standardized. Non-standardized policies (waiver states) In Massachusetts, Minnesota, and Wisconsin, Medigap policies are standardized in a different way.
Each standardized plan in a state– Must offer the same basic benefits
• No matter which company sells it
Costs (monthly premiums) may vary by– Plan– Company– Where you live– Age
Cost Example
Acme Insurance Company - Plan C
DT Insurance Company - Plan C
Benefits Same Same
Monthly Cost $100 $120
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Presentation Notes
The benefits in any Medigap plan identified with the same letter are the same regardless of which insurance company you purchase your policy from. Only the cost will vary, so it’s important to check with different companies licensed to sell Medigap policies in your state. When you buy a Medigap policy, you pay a premium to the insurance company. You must still pay your monthly Medicare Part B premium.
Important Medigap Terms to Know
Pre-existing condition (up to 6 months before Medigap)
– Could delay Medigap coverage up to 6 months
Creditable coverage (certain health coverage)– Could shorten waiting period
Pre-existing waiting period - up to 6 months that the insurance company may refuse to cover a health problem you had diagnosed or treated during the 6 months before your Medigap policy starts. Coverage can’t be delayed just because they think you should have known to see a doctor. Creditable coverage - If you buy a Medigap policy during your Medigap open enrollment period and if you recently had certain kinds of health coverage called “creditable coverage,” it’s possible to avoid or shorten waiting periods for pre-existing conditions. Prior creditable coverage is generally any other health coverage you recently had before applying for a Medigap policy. If you have had at least 6 months of continuous prior creditable coverage, the Medigap insurance company can’t make you wait before it covers your pre-existing conditions. If you were without coverage for more than 63 days, you can only count creditable coverage you had after that break in coverage. It includes: -FEHBP & Union/employer group health plans -TRICARE -Some health insurance policies-A state health benefits risk pool -Medicare Part A or B-Public health plan -Medicaid & CHIP -Health plan under Peace Corps Act -IHS or tribal organization -COBRA Hospital indemnity and specified disease insurance (like cancer insurance), vision, dental and long-term care policies do not provide creditable coverage.
Important Medigap Terms to Know (continued)
Medical underwriting (review of your health)– Could affect acceptance, cost, and coverage date
Guaranteed issue rights– Certain situations when insurance companies must
• Sell you a Medigap policy
• Cover all your pre-existing health conditions
• Can’t charge you more for a Medigap policy because of past or present health problems
Medical underwriting - the process insurance companies use to review your health and medical history to decide whether to accept your application for insurance, how much to charge you, and/or whether to delay your coverage. Fill out any application you receive carefully and completely, including medical information, or your policy could be invalid. Some companies may want to review your medical records before they sell you a policy. Guaranteed issue rights - rights you have in certain situations when insurance companies are required by law to offer you certain Medigap policies even if you have health problems and must cover any pre-existing conditions. These situations are described on slides 46-48. In these situations, an insurance company must do the following: Sell you a Medigap policy Cover all your pre-existing health conditions Can’t charge you more for a Medigap policy because of past or present health problems
policyWhen to buy a Medigap policyOpen enrollment periodSwitching Medigap policiesBuying a Medigap policy
under age 65How much Medigap costs
–Pricing based on ageSteps to buying a Medigap
policy
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Presentation Notes
Buying a Medigap Policy Explains: Who can buy a Medigap policy When to buy a Medigap policy Open enrollment period Switching Medigap policies Buying a Medigap policy under age 65 How much Medigap costs Pricing based on age Steps to buying a Medigap policy
07/12/2010
Who Can Buy Medigap?
Generally must have Medicare Parts A and B
May not be able to buy Medigap under 65 – People with a disability
– People with End-Stage Renal Disease
Guaranteed right to buy a Medigap policy– In your Medigap open enrollment period
– Covered under a guaranteed issue right
Medigap (Medicare Supplement Insurance) 19
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To buy a Medigap policy, you generally must have Medicare Part A and Part B. If you are under age 65 and have a disability or End-Stage Renal Disease (ESRD), you may not be able to buy a Medigap policy until you reach age 65. We will cover Medigap policies for people under age 65 later in this presentation. You are guaranteed the right to buy a Medigap policy if you are: In your Medigap open enrollment period, or Covered under a guaranteed issue right In some situations, you have the right to buy a Medigap policy outside of your Medigap open enrollment period. These rights are called “guaranteed issue rights” because the law says that insurance companies must sell (“issue”) you a Medigap policy even if you have health problems.
6-month Medigap open enrollment period– Begins when you
• Are both age 65 and
• Enrolled in Part B
– Can’t be changed or repeated
When to Buy a Medigap Policy
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Presentation Notes
You may be able to buy a Medigap policy any time an insurance company sells you one, but some times are better than others. The best time to buy is during your 6-month Medigap open enrollment period. It begins when you Are both age 65 and Enrolled in Part B Under Federal law, your Medigap open enrollment period lasts for 6 months. It starts on the first day of the month in which you are both age 65 or older and enrolled in Medicare Part B. Laws may be more generous in some states. Your open enrollment period can’t be changed or repeated although some states have more generous rules. You must have Medicare Parts A and B Situations where you have the right to buy a Medigap policy outside of your Medigap open enrollment period are explained on slides 45-47.
• Charge more because of a past/present health problem
– Companies can• Make you wait for pre-existing condition without
creditable coverage
Policies sold after 1990 guaranteed renewable
Open Enrollment Period (OEP)
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Presentation Notes
You may buy a Medigap policy any time an insurance company will sell you one, but some times are better than others to ensure your best choice, coverage, and cost. Generally, the best time to buy a Medigap policy is during your Medigap open enrollment period because companies can’t: Refuse to sell any Medigap policy it sells Make you wait for coverage (exception below) Charge more because of a past/present health problem A company can make you wait for coverage if you have a pre-existing condition but you don’t have creditable coverage You may want to apply for a Medigap policy before your Medigap open enrollment period starts, if your current health insurance coverage ends the month you become eligible for Medicare OR you reach age 65 to have continuous coverage without any break. If you are 65 or older, your Medigap open enrollment period begins when you enroll in Part B. It can’t be changed or repeated, although some states have more generous rules. As long as you pay your Medigap premium, your policy is automatically renewed each year or “guaranteed renewable.” NOTE: In some states, insurance companies may legally refuse to renew Medigap policies that were bought before 1990.
Consider waiting to enroll in Part B– If you or your spouse is still working and
– You have group health coverage
Notify Social Security if you want to wait
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Presentation Notes
You may want to delay enrolling in Medicare Part B if you or your spouse are working and you have group health coverage through an employer or union based on your or your spouse's current active employment. Your Medigap open enrollment period won't start until after you sign up for Medicare Part B and you won’t have to pay a late enrollment penalty. Remember, once you're age 65 or older and enrolled in Medicare Part B, the Medigap open enrollment period starts and cannot be changed. (Some states have more generous rules.) If you are not going to enroll in Part B due to current employment, it is important that you notify Social Security that you do not want Part B of Medicare. NOTE: If you took Part B while you had employer coverage, you don’t get another open enrollment period when your employer coverage ends.
People with Medicare under age 65– May not be able to buy Medigap
• People with a disability
• People with End-Stage Renal Disease
– If available, may cost more
New Medigap open enrollment period at age 65
Buying a Medigap Policy Under Age 65
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Presentation Notes
Federal law doesn’t require insurance companies to sell Medigap policies to people under age 65. The following states do require Medigap insurance companies sell to people under 65: California*, Colorado, Connecticut, Delaware**, Florida, Hawaii, Illinois, Kansas, Louisiana, Maine, Maryland, Massachusetts*, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Dakota, Texas, Vermont*, Wisconsin. Even if your state isn’t on this list: Some insurance companies may voluntarily sell Medigap policies to some people under age 65. Some states require that people under age 65 who are buying a Medigap policy be given the best price available. Generally, Medigap policies sold to people under age 65 may cost more than policies sold to people over age 65. If you live in a state that has a Medicare open enrollment period for people under age 65, you will still get another Medicare open enrollment period when you reach age 65, and you will be able to buy any Medigap policy sold in your state. *Medigap not available to people with ESRD under age 65. **Medigap only available to people with ESRD.
When can you switch policies?– During your Medigap open enrollment period– If you have a guaranteed issue right– If your state has more generous requirements– You move from your Medigap SELECT service area
• Can switch to plan with same or fewer benefits
30-day “free look” period
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Presentation Notes
In most cases you won’t have a right under Federal law to switch Medigap policies unless you Are within your Medigap open enrollment period Have a guaranteed issue right Live in a state that has more generous requirements Had a Medigap SELECT plan and moved out of the service area If you move out of your Medigap SELECT policy’s area, you can buy a standardized policy with the same or fewer benefits than your current plan, or buy Plan A, B, C, F, K, or L sold in most states by any insurance company. If you switch, don’t cancel your first Medigap policy until you’ve decided to keep the second policy. You have a 30-day “free look” period to decide if you want to keep the new policy. It starts when you get your new policy. You have to pay both premiums for one month.
Why might you switch policies?– You’re paying for benefits you don’t need
– You need more benefits now
– You want to change your insurance company
– You find a cheaper policy
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Presentation Notes
Why might you switch policies? You’re paying for benefits you don’t need You need more benefits now If you bought your Medigap policy before 1992, it may offer coverage not available in newer policies. You want to change your insurance company You find a cheaper policy If you bought your Medigap policy before you were 65 (because you have a disability), you get a Medigap open enrollment period when you turn 65 as long as you are enrolled in Part B. NOTE: Medigap policies sold before 1992 may not be guaranteed renewable. Check to see if there would be a delay in coverage for pre-existing conditions, or a waiting period for certain benefits. You may have to pay more for your new Medigap policy and undergo medical underwriting if you are not buying in your Medicare open enrollment period.
– Where you live (e.g., urban, rural, or ZIP Code)
– Company selling the policy
– If there are discounts (female, non-smokers, married couples)
– Medical underwriting
Premiums vary greatly for same Medigap plan
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There can be big differences in the premiums that different insurance companies charge for exactly the same coverage. Cost depends on Your age (in some states) Where you live (e.g., urban, rural, or ZIP Code) Company selling the policy Premiums vary greatly for same coverage Compare the same Medigap plan Some companies offer discounts for: Females Non-smokers Married couples Medical underwriting can also affect cost since some plans may charge more if you have a pre-existing medical condition.
Everyone pays same regardless of age if 65 or older
Generally least expensive over lifetime
Issue-age-rated Based on age when purchased
Doesn’t go up automatically as you get older
Attained-age-rated Premium based on current age
Goes up automatically as you get older
Costs less when you are 65
Costs more at age 70 or 75
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Presentation Notes
Insurance companies have three ways to price policies based on your age. No-age-rated (also called community-rated) policies—These policies charge everyone the same rate no matter how old they are. In general, no-age-rated Medigap policies are the least expensive over your lifetime. If those under 65 have the right to buy a policy, premiums can be rated differently and they may be charged more. Issue-age-rated policies—The premium for these policies is based on your age when you first buy the policy. The cost does not go up automatically as you get older, but may go up because of inflation. Attained-age-rated policies—The premiums for these policies are based on your age each year. These policies are generally cheaper at age 65, but their premiums go up automatically as you get older. In general, attained-age-rated policies cost less when you are 65 than issue-age-rated or no-age-rated policies. However, when you reach the ages of 70 to 75, attained-age-rated policies usually begin to cost more than other types of policies. When you compare premiums, be sure you are comparing the same Medigap policies. Remember, all premiums may change and go up each year because of inflation and rising health care costs. Reference: Page 20 of the 2010 Choosing a Medigap Policy: A Guide to Health Insurance for People With Medicare, CMS Pub. # 02110. View this publication at http://www.medicare.gov/Publications/Pubs/pdf/02110.pdf. To order copies, visit http://productordering.cms.hhs.gov/ Note: This chart is provided as a handout in the corresponding workbook (see Appendix A).
Four steps1. Decide which Plan A – N meets your needs
2. Find out which companies sell Medigap in your state
3. Call the companies and compare costs
4. Buy the Medigap policy
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Presentation Notes
To buy a Medigap policy, follow these four steps. Decide which Medigap Plan A – N has the benefits you need. Find out which insurance companies sell Medigap policies in your state by calling your State Health Insurance Assistance Program, your State Insurance Department, or visit www.medicare.gov and select “Compare Health Plans and Medigap Policies in Your Area.” Call the insurance companies and shop around for the best policy at a price you can afford. Page 30 of the 2010 Choosing a Medigap Policy: A Guide to Health Insurance for People With Medicare provides a checklist to help compare Medigap policies. Page 31 provides tips to help avoid illegal insurance practices. Buy the Medigap policy. Once you choose the insurance company and the Medigap policy, apply for the policy. The insurance company must give you a clearly worded summary of your Medigap policy when you apply. Reference: These four steps are described in greater detail on pages 27 – 32 of the 2010 Choosing a Medigap Policy: A Guide to Health Insurance for People With Medicare.
1. If she needs any health care during the 3 months she delays getting a Medigap policy, she would have to pay the gaps in Original Medicare coverage out of pocket.
2. She will still be in her Medigap open enrollment period but should delay buying a Medigap policy.
3. Her Medigap open enrollment period ends before she plans to buy a policy. She may have to pay more.
A. Mary’s Medigap open enrollment period will start in two months. She tells you she plans to buy a policy in five months. She has no other coverage. What should she know?
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Answer: 1 Mary’s Medicare open enrollment period lasts for 6 months, starting when she is both 65 and enrolled in Medicare Part B. She can wait the extra 3 months, but she wouldn’t be covered for the gaps in Original Medicare coverage if she needed Medicare-covered services within the 3 months that she could have had a Medigap policy but chose not to. Her coverage is not retroactive.
2. It will stay the same price as you age except for cost-of-living adjustments.
3. It will cost more as you age.
B. Which is true about a Medigap policy that is attained-age-rated?
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Answer: 3. An attained-age-rated policy costs more as you age. The premium based on current age and goes up automatically as you get older. It will cost less when you are 65 than when you are age 70 or 75. Remember, in no-age-rated or (community-rated) policies, everyone pays same regardless of age. It is generally the least expensive over your lifetime. Issue-age-rated policy pricing is based on age when it is purchased and does not go up automatically because of your age.
The Medicare Improvements for Patients and Providers Act (MIPPA) of 2008 changed many things about Medigap plans. Basic benefits have changed, there are new plans, and some plans will no longer be sold on or after June 1, 2010. This is a brief synopsis of the changes to Medigap policies for 2010 from the 2010 Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare, available at http://www.medicare.gov/Publications/Pubs/pdf/02110.pdf. The MIPPA changes are provided in chart form on the next slide.
2010 MIPPA Medigap Changes(* denotes new plans and benefits on or after June 1, 2010)
Basic Benefits Deleted Coverage
Plans No Longer
Sold
Changes to Plan D
Changes to Plan G
New Plan M *
New Plan N *
Add Hospice Coverage- Part A coinsurance*
(Part A coinsurance + 365 days
Part B coinsurance or copayments for outpatient
Blood (first 3 pints per year)
Preventive Services
No In-Home Recovery
E, H, I, J Basic, including 100% Part B coinsurance
Skilled Nursing Facility coinsurance
Part A deductible
Foreign Travel Emergency
(In-Home recovery deleted)
Basic, including 100% Part B coinsurance
Skilled Nursing Facility coinsurance
Part A deductible
100% Part B Excess *
Foreign Travel Emergency
(In-Home Recovery deleted)
Basic, including 100% Part B coinsurance
Skilled Nursing Facility coinsurance
50% Part A deductible
Foreign Travel Emergency
Basic, including 100% Part B coinsurance (except up to $20 office visit copayment; up to $50/ER)
Skilled Nursing Facility coinsurance
Part A deductible
Foreign Travel Emergency
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Presentation Notes
Plans E, H, I, and J will no longer be sold. However, people with these plans may keep them. They may have the chance to switch to another plan. Contact the insurance company or your State Department of Insurance to find out your options. A new Plan M is created. It is the same as Plan D, but with a 50% coinsurance on the Part A deductible. A new Plan N is created. It is the same as Plan D, but with the 100% Part B coinsurance benefit, up to a $20 copay per physician visit, and up to a $50 per Emergency Room visit, unless the patient is admitted. Note: This chart is provided as a handout in the corresponding workbook (see Appendix B).
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Medigap PlansMedigap plans available
effective June 1, 2010 Special Medigap plans
Medigap (Medicare Supplement Insurance)
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Presentation Notes
Medigap Plans explains: Medigap plans available effective June 1, 2010 Special Medigap plans
This chart shows Medigap plans and their coverage available for sale effective June 1, 2010. Each checkmark shows that that Medigap Plan covers 100% of the policy holders share of these Medicare-covered services. If a percentage is provided, the plan covers that percent of the policyholder’s share of these Medicare-covered services. Chart Footnotes: *Plan F also offers a high-deductible plan. This means you must pay for Medicare-covered costs up to the deductible amount $2,000 in 2010 before your Medigap plan pays anything. **After you meet your out-of-pocket yearly limit and your yearly Part B deductible ($155 in 2010), the Medigap plan pays 100% of covered services for the rest of the calendar year. Out-of-pocket limit is the maximum amount you would pay for coinsurance and copayments. ***Plan N pays 100% of the Part B coinsurance except up to $20 copayment for office visits and up to $50 for emergency department visits. This chart appears on page 13 of the 2010 Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare. You can view, order, or download this publication from http://www.medicare.gov/Publications/Pubs/pdf/02110.pdf. Note: This chart is provided as a handout in the corresponding workbook (see Appendix C).
Massachusetts, Minnesota, and Wisconsin (waiver states) Medicare SELECT (network plans) Medigap plans with drug coverage
– No longer sold
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Presentation Notes
There are some different types of Medigap plans including: High-deductible Plans F, J Massachusetts, Minnesota, and Wisconsin (waiver states) Medicare SELECT (network plans) Medigap plans with drug coverage (sold prior to January 1, 2006) Information on the coverage provided in these the waiver states can be found in the 2010 Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare. You can view, order, or download this publication from www.medicare.gov/Publications/Pubs/pdf/02110.pdf.
$2,000 deductible for 2010– Amount can go up each year
Often have lower premium Out-of-pocket costs may be higher May not be able to change plans Additional deductibles*Plan J no longer sold after June 1, 2010
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Presentation Notes
Insurance companies are allowed to offer a “high-deductible option” on Plans F and J*. If you choose this option, you must pay a $2,000 deductible in 2010 before the plan pays anything (amount can go up each year). High-deductible policies often have lower premiums. Your out-of-pocket costs may be higher. You may not be able to change plans. It’s the insurer’s option to allow a switch in plans, e.g., some plans may not allow a switch from a regular Plan F to a high-deductible Plan F.) In addition to paying the deductible for the high-deductible option on Plans F and J, you must also pay a deductible for foreign travel emergencies ($250 per year for Plans F and J) and for prescription drugs ($250 per year for Medigap Plan J policies sold before 2006; Medigap Plan F doesn’t cover prescription drugs). These high-deductible options on Plans F and J are not available in all states. *No longer sold after June 1, 2010
Pay only partial costs after Medicare pays Have annual out-of-pocket maximum
Plan K Plan L
Percent Plan Pays for Most Services 50% 75%
2010 Out-of-Pocket Limit $4,620 $2,310
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Presentation Notes
The Medicare Modernization Act of 2003 created two new Medigap plans, Plans K and L (which also can be sold as Medicare SELECT). Plans K and L must include the basic benefits Plans K and L only pay partial costs after Medicare pays Plan K pays 50% of your deductible and coinsurance or copayment for most services Plan L pays 75% of your deductible and coinsurance or copayment for most services Plans K and L have annual out-of-pocket maximums In 2010, Medigap Plan K has a $4,620 out-of-pocket annual limit Plan L has a $2,310 out-of-pocket annual limit. The out-of-pocket annual limits can increase each year because of inflation. Once you meet the annual limit, the plan pays 100% of the Medicare Part A and Part B copayments and coinsurance for the rest of the calendar year, as well as the Part B deductible if it has not already been paid. Charges from your doctor that exceed Medicare-approved amounts, called “excess charges,” aren’t covered and don’t count toward the out-of-pocket limit. You will have to pay these excess charges. Excess charges are generally limited to 15% above the Medicare-approved amount.
Medigap policies that covered Rx drugs– Only sold before January 1, 2006
• Plans H, I and Jo No longer sold as of June 1, 2010
• Other standardized plan with Rx policy rider
– Same policies were sold without drug coverage
– Generally don’t provide creditable drug coverage
Medigap Plans with Rx Coverage
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Medigap policies covering prescription drugs Plans H, I, and J sold before 2006, included some limited prescription drug coverage. There are also policies available in Massachusetts, Minnesota, and Wisconsin and some pre-standardized plans purchased before mid-1992 that have prescription drug coverage. Also, there are some standardized policies with prescription drug coverage added through a policy rider as an innovative benefit. Plans H, I and J are no longer sold after June 2010, but people who already have them can keep them. Plans H, I, and J policies were also sold without drug coverage. Most Medigap policies with a drug benefit sold before January 1, 2006, are not considered creditable drug coverage. This means they may not be as good as Medicare prescription drug coverage because they don’t offer the equivalent benefits that Medicare drug plans do. If you kept Medigap drug coverage that is not creditable and you did not join a Medicare drug plan, you may have to pay a penalty to enroll in a Medicare prescription drug plan later. NOTE: Discount prescription drug cards offered as an innovative benefit are not considered “coverage” and therefore are not creditable coverage.
Different kinds of Medigap policies– NOT labeled with letters
Benefits comparable to standardized plans– Basic and optional benefits
For information– Call State Insurance Department
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Minnesota, Massachusetts, and Wisconsin are waiver states. This means they provide: Different kinds of Medigap policies NOT labeled with letters Comparable benefits to standardized plans They have a different system that includes basic (“core”) and optional (“rider”) benefits. Minnesota and Wisconsin have approved the sale of Plans K and L in addition to core and rider plans. Call your SHIP or your State Insurance Department for more information. Information on the coverage provided in these states is available in the 2010 Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare. You can view, order, or download this publication from http://www.medicare.gov/Publications/Pubs/pdf/02110.pdf. Note: Minnesota plans M, N and high-deductible plan F became available on June 1, 2010. For Wisconsin, a high-deductible plan ($1,900 in 2010) became available after June 1, 2010. [NOTE to instructor: If you don’t work with people who live in one of these three states, you may want to hide this slide.]
A type of Medigap policy To get full benefits (except in emergency)
– Must use specific hospitals– May have to see specific doctors
Generally cost less than non-network plans Can switch to plan with equal or lesser value May not be offered in your state
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Another type of Medigap policy is Medicare SELECT. If you buy a Medicare SELECT policy, you are buying one of the 11 current standard Medigap Plans A through N sold on or after June 1, 2010. You need to use specific hospitals and, in some cases, network doctors to get full insurance benefits (except in an emergency). For this reason, Medicare SELECT policies generally cost less. If you do not use a Medicare SELECT provider for non-emergency services, you may have to pay what Medicare does not pay. Medicare will pay its share of approved charges as long as your provider participates. If you currently have a Medicare SELECT policy, you also have the right to switch, at any time, to any regular Medigap policy being sold by the same company. The Medigap policy you switch to must have equal or less coverage than the Medicare SELECT policy you currently have. At the present time, some Medicare SELECT plans in some states resemble Preferred Provider Organizations (PPOs). For more information about Medicare SELECT, you can view, order, or download the 2010 Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare from http://www.medicare.gov/Publications/Pubs/pdf/02110.pdf.
A. All Plans A, B, C, D, F, G, K, L, M and N cover
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A. All Plans A – N cover Part A coinsurance for inpatient hospital care Dental care Prescription drugs All of the above Answer: 1. Part A coinsurance for inpatient hospital care
B. Medigap Plans K and L Have different cost-sharing than Plans A - J Cover hospice care coinsurance or copayment Cover at different percentages All of the above Answer: 4. All of the above
Called “guaranteed issue rights” Situations with special rights to buy Medigap
– After Medigap open enrollment period
– Companies must sell you a Medigap policy
– Must cover all pre-existing conditions
– Can’t charge more
These are Federal protections– Some states have additional protections
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Guaranteed issue rights apply when insurance companies are required by law to sell or offer you a Medigap policy. In these situations, an insurance company: Can't deny you Medigap coverage or make you wait for coverage to start Must cover you for all pre-existing conditions Can't charge you more for a policy because of past or present health problems Although in certain situations you have a guaranteed issue right to purchase a Medigap policy, this does not necessarily guarantee you the right to choose any Medigap plan. In most cases, there are limited plans from which you can choose. These Medigap protections are from Federal law. Many states provide more Medigap protections than Federal law. Call your State Health Insurance Assistance Program (SHIP) or State Insurance Department for more information. Generally, you must apply for a policy within 63 days from the day your other coverage ends. You should keep a copy of any letters, notices, and claim denials (and the postmarked envelope they come in) as proof of loss of coverage. Be sure to keep anything that has your name on it. You may need to send a copy of some or all of these papers with your application for a Medigap policy to prove you lost coverage and have the right to guaranteed issue.
Medigap Guaranteed Issues RightsYou have a Medigap guaranteed issue right if…
You have the right to buy…
You can/must apply for a Medigap policy…
#1: You are in a Medicare Advantage (MA) Plan, and your plan is leaving Medicare or stops giving care in your area, or you move out of the plan’s service area.Note: If you immediately join another MA Plan, you can stay in that plan for up to 1 year and still have the rights described in situations #4 and #5.
Medigap Plan A, B, C, F, K, or L that is sold in your state by any insurance company.
You only have this right if you switch to Original Medicare rather than joining another Medicare Advantage Plan
As early as 60 calendar days before the date your health care coverage will end, but no later than 63 calendar days after your health care coverage ends. Medigap coverage can’t start until your Medicare Advantage Plan coverage has ended.
#2: You have Original Medicare and an employer group health plan (including retiree or COBRA coverage) or union coverage that pays after Medicare pays and that plan is ending.
Note: In this situation, state laws may vary.
Medigap Plan A, B, C, F, K, or L that is sold in your state by any insurance company.If you have COBRA coverage, you can either buy a Medigap policy right away or wait until the COBRA coverage ends.
No later than 63 calendar days after the latest of these 3 dates:1.Date the coverage ends2.Date on the notice you get telling
you that coverage is ending (if you get one)
3.Date on a claim denial, if this is the only way you know that your coverage ended.
Here is a summary of some situations where you may have a guaranteed issue right to buy a Medigap policy that an insurance company is offering in your state. As seen in the chart, you may be limited to which plans you can buy. It is important to note that there are time limits for when you can buy a Medigap policy that varies depending on the situation. Note: This chart is provided as a handout in the corresponding workbook (see Appendix D).
Medigap Guaranteed Issues RightsYou have a Medigap guaranteed issue right if…
You have the right to buy…
You can/must apply for a Medigap policy…
#3: You have Original Medicare and a Medicare SELECT policy. You move out of the Medicare SELECT policy’s service area.
You can keep your Medigap policy, or you may want to switch to another Medigap policy.
Medigap Plan A, B, C, F, K, or L that is sold by any insurance company in your state or the state you are moving to.
As early as 60 calendar days before the date your health care coverage will end, but no later than 63 calendar days after your health care coverage ends.
#4: (Trial Right) You joined a Medicare Advantage Plan or Program of All-inclusive Care for the Elderly (PACE) when you were first eligible for Medicare Part A at age 65, and within the first year of joining, you decide you want to switch to Original Medicare.
Any Medigap policy that is sold in your state by any insurance company.
As early as 60 calendar days before the date your coverage will end, but no later than 63 calendar days after your coverage ends.
Note: Your rights may last for an extra 12 months under certain circumstances.
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Here is a continuation of the summary of some situations where you may have a guaranteed issue right to buy a Medigap policy that an insurance company is offering in your state. As seen in the chart, you may be limited to which plans you can buy. It is important to note that there are time limits for when you can buy a Medigap policy that varies depending on the situation. Note: This chart is provided as a handout in the corresponding workbook (see Appendix D).
Medigap Guaranteed Issues RightsYou have a Medigap guaranteed issue right if…
You have the right to buy… You can/must apply for a Medigap policy…
#5: (Trial Right) You dropped a Medigap policy to join a Medicare Advantage Plan (or to switch to a Medicare SELECT policy) for the first time; you have been in the plan less than a year, and you want to switch back.
The Medigap policy you had before you joined the Medicare Advantage Plan or Medicare SELECT policy, if the same insurance company you had before still sells it. If it included drug coverage, you can still get that same policy, but without the drug coverage.
If your former Medigap policy isn’t available, you can buy a Medigap Plan A, B, C, F, K, or L that is sold in your state by any insurance company.
As early as 60 calendar days before the date your coverage will end, but no later than 63 calendar days after your coverage ends.
Note: Your rights may last for an extra 12 months under certain circumstances.
#6: Your Medigap insurance company goes bankrupt and you lose your coverage, or your Medigap policy coverage otherwise ends through no fault of your own.
Medigap Plan A, B, C, F, K, or L that is sold in your state by any insurance company
No later than 63 calendar days from the date your coverage ends.
#7: You leave a Medicare Advantage Plan or drop a Medigap policy because the company hasn’t followed the rules, or it misled you.
Medigap Plan A, B, C, F, K, L, M, or N that is sold in your state by any insurance company.
No later than 63 calendar days from the date your coverage ends.
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Here again is a continuation of the summary of some situations where you may have a guaranteed issue right to buy a Medigap policy that a company is offering in your state. As seen in the chart, you may be limited to which plans you can buy. It is important to note that there are time limits for when you can buy a Medigap policy that varies depending on the situation. It is important to note that as the pools of members in plans reduce, premiums for those plans may rise quicker. Note: This chart is provided as a handout in the corresponding workbook (see Appendix D).
Suspend up to 2 years if under 65– While enrolled in your/spouse’s employer group
health plan
Get your Medigap policy back at any time– Notify insurer within 90 days of losing employer
If you are under 65, have Medicare, and have a Medigap policy, you have a right to suspend your Medigap policy benefits and premiums, without penalty, while you are enrolled in your or your spouse's employer group health plan. You can enjoy the benefits of your employer's insurance without giving up your ability to get your Medigap policy back when you lose your employer coverage. If, for any reason, you lose your employer group health plan coverage, you can get your Medigap policy back. If you notify your Medigap insurance company that you want your Medigap policy back within 90 days of losing your employer group health plan coverage: Your Medigap benefits and premiums will start again on the day your employer group health plan coverage stops. The Medigap policy must have the same benefits and premiums it would have had if you had never suspended your coverage. Your Medigap insurance company can't refuse to cover care for any pre-existing conditions you have.
If you have both Medicare and Medicaid– You generally can’t buy a Medigap policy
Can suspend Medigap policy – Within 90 days of getting Medicaid (up to 2 years)– Can start it up again
• No new medical underwriting or waiting periods
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If you have both Medicare and Medicaid, most of your health care costs are covered. Medicaid is a joint Federal and state program, and coverage varies from state to state. People with Medicaid may get coverage for things that aren’t covered by Medicare, like some nursing home care and home care. If you already have Medicaid, an insurance company can’t legally sell you a Medigap policy unless: Medicaid pays your Medigap premium Medicaid only pays all or part of your Medicare Part B premium Remember, the insurance company may use medical underwriting, which could affect acceptance, cost, and coverage date If you have a Medigap policy and then become eligible for Medicaid, there are a few things you should know: You can put your Medigap policy on hold (“suspend” it) within 90 days of getting Medicaid. You can suspend your Medigap policy for up to 2 years. However, you may choose to keep your Medigap policy active so you can see doctors that don’t accept Medicaid. At the end of the suspension, you can restart the Medigap policy without new medical underwriting or waiting periods for pre-existing conditions NOTE: If you suspend a Medigap policy you bought before January 2006, and it included prescription drug coverage, you can get the same Medigap policy back, but without the prescription drug coverage.
If you suspend your Medigap policy– You do not pay Medigap premiums– The Medigap policy will not pay benefits
May not want to suspend – To see doctors who don’t accept Medicaid
Call state Medicaid office or SHIP for help
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If you put your Medigap policy on hold (suspend it): You won’t have to pay your Medigap policy premiums while it is suspended. Your Medigap policy won’t pay benefits while it is suspended. There are advantages to suspending your Medigap policy rather than dropping it. In some cases, it may not be a good idea to suspend your Medigap policy so you may choose see doctors that don’t accept Medicaid. Call your State Medicaid office or State Health Insurance Assistance Program (SHIP) to help you with this decision. To get the phone number, call 1-800-MEDICARE (1-800-633-4227), or TTY 1-877-486-2048. For questions about suspending a Medigap policy, call your Medigap insurance company.
1. Drop both his Medigap policy and his wife’s group health coverage.
2. Drop his Medigap policy.
3. Suspend his Medigap policy and keep both Original Medicare and his wife’s group health coverage.
A. John is 58 and has Original Medicare because he has a disability. He has a Medigap policy. His wife is working and John is covered by her group health plan. The coverage is creditable. What should he do about his Medigap policy?
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Answer: 3 John can suspend his Medigap policy and enjoy the benefits of the group health coverage without having to pay his Medigap premium for up to 2 years. If, for any reason, John loses his employer group health plan coverage, he can get his Medigap policy back. He must notify his Medigap insurance company that he wants his Medigap policy back within 90 days of losing the employer group health plan coverage. His Medigap benefits and premiums will start again on the day his wife’s employer group health plan coverage stops. The Medigap policy must have the same benefits and premiums it would have had if he had never suspended his coverage. If his wife continues to work and get group health coverage, he will have to decide if he wants to drop the Medigap policy. If his state has a Medigap Open Enrollment Period for people under 65, he will get a Medigap Open Enrollment Period when he turns 65.
B. Federal law is the only protection you have with Medigap policies.
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Answer: 2. False. States have additional rights and protections. Call your State Health Insurance Assistance Program (SHIP) or State Insurance Department for more information about the additional rights and protections your state may provide.
2010 Choosing a Medigap Policy: A Guide to Health Insurance for People With Medicare, CMS Pub. # 02110– View at http://www.medicare.gov/
Publications/Pubs/pdf/02110.pdf
– Order copies at http://productordering.cms.hhs.gov/
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The primary reference source for this module was the 2010 Choosing a Medigap Policy: A Guide to Health Insurance for People With Medicare. This publication is available at www.medicare.gov on the Medicare website.
State Health Insurance Assistance Programs (SHIPs)
State Insurance Department
1-800-MEDICARE
– 1-800-633-4227
– 1-877-486-2048 for TTY users
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Information is also available from State Insurance Departments and SHIPs. You can find the number for your state in the 2010 Choosing a Medigap Policy: A Guide to Health Insurance for People With Medicare. View this publication at http://www.medicare.gov/Publications/Pubs/pdf/02110.pdf. To order copies, visit http://productordering.cms.hhs.gov/ You can also call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048.
